Indo Pacific Power Shifts
I was recently at a well attended function where the Minister for Foreign Affairs, Julie Bishop, discussed the recent launch of the Government’s 2017 Foreign Policy White Paper.
At the beginning of the Paper, in the Prime Minister’s introduction (page iii), he makes a telling point about how changing global power relationships are likely to impact Australia in the future:
“This Foreign Policy White Paper shows Australia to be focused on our region, determined to realise a secure, open and prosperous Indo-Pacific, while also strengthening and diversifying partnerships across the globe.”
The concept of the Indo-Pacific is explained in Chapter two: A contested world in a section called “Power shifts in the Indo-Pacific” (page 25).
For economists and financial commentators, there is an interesting chart that shows Commonwealth Treasury projections (in PPP or purchasing power parity terms) on the size of various economies in the region, particularly Australia, Indonesia, China, India and the US. India stands out with a substantial increase in absolute size expected by 2030.
Although these forecasts are subject to change, it is clear that India (and Indonesia) will become increasingly important to Australia from economic and national security perspectives. Therefore, individual company transactions and trade deals are more likely to be considered by the government in this light.